Decoding the Hype Behind the Natural Gas Industry’s Hydrogen Push

DeSmog takes a critical look at the burgeoning new fuel — and debunks some of the myths surrounding it.
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A Shell hydrogen fueling station
Main Image: Hydrogen Fuel Station.  Credit: Roo ReynoldsCC BY-NC 2.0

It seems like nearly every day another hopeful article touts the potential of using hydrogen as a fuel to tackle climate change. What’s known as “green hydrogen” — which relies on renewable power for production — is getting the bulk of that attention.

In December, ABC News ran an article with the headline “Why green hydrogen is the renewable energy source to watch in 2021.” And as Bloomberg has reported, Airbus is betting big on hydrogen as a fuel for its planes. Meanwhile, South Korea’s SK Global just announced an investment in U.S. hydrogen fuel cell producer Plug Power

But among those most hopeful for the future hydrogen economy is the fossil fuel industry and its allies. The Hydrogen Council — a leading lobbying group whose members include major oil and car companies — predicts that hydrogen will account for 18 percent of total energy demand by 2050. And as DeSmog recently reported, a major PR firm for the fossil fuel industry is behind a big push for hydrogen in Europe.

However, right now the majority of hydrogen actually is produced from fossil fuels: namely, methane (natural gas) and coal.

Analysis shows that hydrogen is also currently inefficient and cost-prohibitive when compared to the approach to decarbonize the economy known as the electrification of everything, which would involve switching the majority of transportation and heating from burning fossil fuels to electricity produced increasingly by renewables.

All of this hydrogen hype raises a lot of questions. So, from “what is hydrogen energy” to “can we believe all the hype,” DeSmog takes a critical look at the burgeoning new fuel — and debunks some of the myths surrounding it.

What is hydrogen energy?

Hydrogen is the most abundant element in the universe and can be used as a way to store and carry energy — much like a battery — which is why it is appealing as a way to replace burning fossil fuels for transportation, heat, and power.

There are several ways to produce hydrogen, but almost all of it currently in production uses methane (natural gas) as the feedstock, with non-renewable energy powering that production.  This process is called steam reforming, and breaks down methane into hydrogen and carbon dioxide. The result is what is known as “gray hydrogen,” or, if technology is used to capture the carbon dioxide emissions released during production, it becomes known as “blue hydrogen.”

The majority of hydrogen projects currently being promoted by oil and gas, auto, and industrial turbine companies and countries — which believe hydrogen should be deployed on a wide scale to help the world decarbonize — rely mostly on fossil fuel-derived blue and gray hydrogen.

Hydrogen can also be produced from water with renewable energy — this is what’s known as “green hydrogen.”

Green hydrogen is produced via the electrolysis process to convert water into hydrogen. Currently, it makes up less than one percent of the hydrogen being consumed globally, meaning over 99 percent of current hydrogen consumption — mostly used for industrial processes including oil refining — is derived from fossil fuels (blue and gray hydrogen).

Hydrogen fuel cells supplied with green hydrogen are likely to be an integral part of a fully decarbonized economy. Fuel cells work by using hydrogen to produce electricity which can then power a motor instead of using battery power, such as for electric vehicles.

Green hydrogen can store energy without the climate footprint of fossil fuels, and represents a possible solution for situations where electrification and batteries are not feasible, such as long-haul transportation, aviation, and some industrial applications like steel production.

The prospect of green hydrogen also makes for great ad copy and feel-good stories about green energy solutions. Energy companies such as Shell, Equinor, and RWE are all promoting it on corporate websites and via social media. But its use is likely decades away from its potential to significantly contribute to decarbonizing the economy.

Even with its efforts to promote green hydrogen, Shell’s own website accurately describes the current situation with hydrogen stating, “Whilst green hydrogen is the ideal aspiration for a low-carbon energy future, that technology has a number of years to go before it is of a competitive price range. In the interim, blue hydrogen can help create the demand and transport networks for hydrogen whilst green hydrogen costs fall.”

A January 2021 Bloomberg article on Siemen’s efforts to produce green hydrogen using offshore wind power notes that “any such deployment at scale is a long way off.”

Producing large amounts of green hydrogen also requires massive amounts of renewable energy. According to the UK government’s independent Climate Change Committee, for instance, the country would need 30 times its current offshore wind capacity in order to produce enough green hydrogen to replace all gas boilers in the UK.

A lifeline for the gas industry

The concept of natural gas as a “bridge fuel” to a point in the future when renewable energy is economically viable is overdirty fuel, raising pressure on the industry. Now, the European gas lobby Eurogas has begun talking up blue hydrogen — derived from methane and relying on pricey and largely undeveloped carbon capture technology — as the new bridge fuel.

The natural gas industry has been a victim of its own success, producing record amounts of gas but losing massive amounts of money in the process. Fracking has helped unleash huge amounts of methane, and oil and gas companies continue to discover more natural gas that they need to sell — because their continued existence is based on discovering and selling more oil and gas. But the reality is that much of that natural gas will remain in the ground as stranded assets because there won’t be willing buyers unless the industry can convert its current infrastructure to use methane-derived hydrogen to create a new market for methane.

At the same time the natural gas industry is producing record amounts of methane, it is facing competition from renewables in its two largest markets — power generation and the heating of buildings. In the United States, municipalities have begun banning the use of natural gas for heating and cooking in new construction due to climate concerns and last year natural gas was surpassed by renewables in the construction of new power generation capacity.

As an August 2020 article in Nature explained: “…the gas industry is turning to hydrogen for a new lease of life.”

The vision the gas industry is promoting is one in which hydrogen fuel will replace methane for power generation and home heating, despite a number of technical and economic barriers. All of this with the promise that someday green hydrogen eventually will replace blue hydrogen in a low-carbon economy.

A big player in the European push for a hydrogen economy is the United Kingdom. However, the UK’s Climate Change Committee estimates that by 2050, 80 percent of the hydrogen consumed in the United Kingdom would be from blue hydrogen, with only 20 percent expected to come from green hydrogen.

And in December, Canada announced a new national hydrogen strategy. In covering the announcement, Reuters described why this appeals to the Canadian oil and gas industry: “So-called ‘blue’ hydrogen derived from natural gas, with the resulting carbon emissions captured and stored, is a potentially useful pivot for companies in the struggling oil patch.”

The U.S., meanwhile, is not a leader in the efforts to promote hydrogen. The Department of Energy, however, did release a “Hydrogen Program Plan” in November following the release of the “Road Map to a U.S. Hydrogen Economy” issued and funded by “a coalition of major oil & gas, power, automotive, fuel cell, and hydrogen companies.”

Green Tech Media reported that “The Road Map to a U.S. Hydrogen Economy” was described as “agnostic” by Jack Brouwer, a professor at the University of California at Irvine and associate director of the National Fuel Cell Research Center, when it comes to the source of hydrogen (methane vs. water). The plan mentions the use of methane derived hydrogen throughout and also promotes the idea of using hydrogen for “blending into the gas grid” — where it would be burned with a mixture of methane.

Hydrogen’s costly economics

In July 2020, Power Magazine published an article written by an executive at Siemens Energy titled, “At the Dawn of the Hydrogen Economy.” As the article touts: “It is clear that the next significant transformation in the energy transition will be based on the hydrogen economy.”

This idea that the world is about to move to a hydrogen economy, however, ignores the fact that electricity produced by wind and solar are already doing the things that the hydrogen economy hopes to accomplish someday: provide cheap power production and home heating and cooling.

Meanwhile, battery electric vehicles are cheaper and much more efficient than hydrogen fuel cell vehicles. Additionally, battery electric vehicles can be charged using existing residential power and the battery electric vehicle industry has a huge lead in recharging infrastructure compared to hydrogen — there are 46 hydrogen refueling stations in the U.S. compared to approximately 29,000 electric charging stations.

This points to a major challenge facing green hydrogen: the cost. Green hydrogen is currently cost prohibitive with steam reforming of methane to produce hydrogen being the cheapest method.

The main cost for producing green hydrogen is the price of renewable electricity — which powers the electrolysis process that creates the hydrogen. A new study from energy industry consultants Wood MacKenzie expects that “green hydrogen will be able to successfully scale and realize production cost declines of up to 64% by 2040” but also predicts that gray hydrogen will remain the cheapest type in the U.S. through 2040. Other studies say green hydrogen could be cost competitive to replace diesel in transportation by 2030.

As the rapid decline of coal during the Trump administration has shown, the energy transition will be driven by economics. In the U.S., the coal industry is dying because it is simply more expensive than renewable energy and methane for power generation.

Green hydrogen requires cheaper renewable electricity to be economically viable. However, that cheaper renewable energy is also a better solution for much of what the hydrogen industry plans to use green hydrogen to accomplish (power generation, home heating, personal transportation). So, as the economics continue to drive the energy transition, green hydrogen is already in a losing position for many of the applications its supporters are pushing.

The technical challenges

Hydrogen doesn’t just face economic barriers, though; there are technical challenges as well.

ABC News paraphrases the view of Julio Friedmann, senior research scholar at the Center on Global Energy Policy (CGEP) at Columbia University: “One of the reasons why there is so much interest and enthusiasm surrounding green hydrogen is that the infrastructure already exists for it.” (CGEP is known for pushing oil and gas industry talking points and after refusing to divulge its funders for years, it has revealed that it is funded by many of the major players in oil and gas including Exxon, BP, and Saudi Aramco.)

Friedmann’s argument is that hydrogen can simply replace methane in the natural gas infrastructure. But there are two issues with this.

The first is that hydrogen makes steel pipes brittle. As DeSmog has previously noted, a 2018 paper published in the journal Procedia Structural Integrity, found that “using pipelines designed for natural gas conduction to transport hydrogen is a risky choice” as doing so “may cause fatigue and damage the structure.”

Switching the existing pipeline infrastructure to transport and distribute hydrogen instead of methane would risk damaging the pipelines, leading to leaks, failures, and explosions. Plus, hydrogen can pose more of an explosion risk than methane.

Hydrogen is also a much smaller molecule than methane, meaning it is very likely to leak more than methane, which already has significant leakage in existing pipelines. One study suggests hydrogen would leak at a rate three times higher than methane.

Hydrogen leaks a lot easier. The pipes that transport methane, there is like a one percent leakage rate from those pipes,” Mark Jacobson, Professor of Civil and Environmental Engineering at Stanford University, told DeSmog. “The leakage rate of hydrogen from the same pipes is going to be much larger because it’s a much smaller molecule. I don’t understand how they could use those pipes without huge leakage rates.”

Burning hydrogen is inefficient

The idea of using existing natural gas pipeline infrastructure for hydrogen is based on the goal of burning that hydrogen to heat homes and generate electricity.

This approach is a big part of the plan for the European hydrogen economy and the current manufacturers of gas turbines are all working to design hydrogen-compatible gas turbines that will also burn hydrogen to create electricity.

For example, a slide show produced by Siemens — a member of a consortium working on hydrogen power production — shows green hydrogen being combined with methane to produce electricity and then labeling the finished product “green energy to grid.”

Source: Siemens

While this process is appealing to the existing gas industry, it is inefficient.

Jacobson, who recently authored the new book “100% Clean, Renewable Energy and Storage for Everything,” dismissed the oil and gas industry’s current efforts to sell hydrogen as a clean energy replacement for methane gas. “Nobody should use hydrogen in a power plant to generate electricity,” Jacobson states. “It’s inefficient to electrolyze hydrogen and then burn it.”

Green Hydrogen’s role in a decarbonized economy

Despite the misleading efforts of the gas industry to sell blue and gray hydrogen as a climate solution, green hydrogen can play an important role in a decarbonized future in certain situations.

There is a tipping point where hydrogen actually becomes more efficient than battery electric vehicles. It’s a tipping point of weight and distance,” Jacobson explained.

Hydrogen fuel cells are currently better suited than batteries for long distance travel and to transport heavy loads, which positions green hydrogen as the likely climate solution for long haul trucking, shipping, and aviation.

Green hydrogen could also replace fossil fuels in industrial applications, like steel production, although the International Energy Agency recently forecast that only 10 percent of steel will be produced with green hydrogen by 2050.

Additionally, hydrogen can store energy, using excess renewable energy for electrolysis to produce green hydrogen for later use.

More immediate solutions

Hydrogen is currently a distraction, some experts say, from the proven technologies that are cheaper and scalable right now — not in 2040. Solar and wind power plus energy storage create clean and cheap electricity that can be used today for heating, power, and much of land-based transportation.

That’s the whole thing [with hydrogen], it’s to somehow slow down the electrification,” David DiCarlo, Associate Professor at the Department of Petroleum and Geosystems Engineering at University of Texas at Austin, explained to DeSmog. “This whole thing is to put some noise out, for a little while, and then it will all die down.”

And when it comes to heating homes, heat pumps powered by clean electricity are a far better solution than converting to hydrogen. BNEF’s series on hydrogen notes that there is an “80% energy saving by using a heat pump” versus hydrogen for home heating when you consider “losses from electrolysis, compression, and transport of hydrogen.”

Electric vehicles powered by batteries are a far better solution for passenger vehicle travel than hydrogen fuel cells for many reasons, including price, performance, and availability of charging options. The widespread adoption of battery-powered electric vehicles compared to hydrogen vehicles is proving this argument.

Electrification of everything also eliminates the risk from methane and hydrogen causing fatal explosions.

As much as we can electrify, not converting electricity to hydrogen and then back again to electricity, the better,” Jacobson said.

The fossil fuel industry effectively set back the electric vehicle market by killing off the first viable electric vehicles. Blue hydrogen is the industry’s effort to similarly set back the electrification of everything by decades.

The oil and gas industry will do everything it can to make blue hydrogen a reality. But like with coal and natural gas, hydrogen makes little economic sense. That is, except for the limited applications where electrification doesn’t work — like aviation.

Will green hydrogen be economically competitive with renewable power applications in 2040? Perhaps. But that might not be fast enough to match the pace of decarbonization scientists say we need to avoid catastrophic climate change.

The world already has an affordable solution to swiftly decarbonize much of the economy now — solar and wind plus battery storage, which continue to grow on a massive scale globally. Meanwhile, the oil and gas industry is once again trying to disrupt the process, this time with methane-derived hydrogen.

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Justin Mikulka is a research fellow at New Consensus. Prior to joining New Consensus in October 2021, Justin reported for DeSmog, where he began in 2014. Justin has a degree in Civil and Environmental Engineering from Cornell University.

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